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The ratings reflect
However, slow local demand and expanded capacity resulted in depressed cement prices (especially in north region). Export is another avenue. Industry wide exports (sizeable increase in
The company's cement dispatches increased to 0.854 mln M.Tons for 1HFY20 (1HFY19: 0.794 mln M. Tons). However, depressed cement prices lead to decrease of 6% in net sales revenue. The company's capacity enhancement plans are still at halt owing to north region dynamics. The company's business profile remained adequate on account of aforementioned factors while margins and profitability witnessed decline. Going forward, along with improvement in volumes, restoring operating and EBITDA margins at earlier healthier levels remains vital for the company. The financial profile remains adequate as long term leveraging expected to remain at the same level. The ratings draw comfort from sponsor families, having prime focus of the company.
The ratings are dependent on upholding of the company's business vis-Ã -vis financial risk profile in current economic scenario. Industry's dynamics encompassing expanded supply, substantial decline in local demand amid country wide lock down will negatively affect the ratings. The proactive measures taken by management in diluted north region dynamics will remain vital for holding ratings at the current level.
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